From the same play that produced my post on generational wealth gap: I made a manifesto promise to improve equality, and I’m coming up a could points short. That on its own is fine, it’s just the way the game can go. However, I’m having a look at what improves or hurts equality, and I think some of the focus is in the wrong place. Specifically there is too much emphasis on taxation and too little on provision of service.
I can’t fit the full stack in one screen shot, but the point I was trying to make is that too much is achieved for the poor with focused taxation and too little is achieved through provision of service. The fact that the library is open and well funded so people can go print a resume or whatever else, or having properly funded legal aid so nobody is coerced into false confession because they can’t afford a lawyer makes for more of a direct impact on people lives than the existence of an inheritance tax or luxury goods tax.
The part where I think you modeled it well is with sales tax. Yes, this tax is paid at the same rate by everybody, and wealthy people spend more and therefore pay more of it. However, the poor will notice the missing money far more than the wealthy, therefore it makes sense for this tax to hit equality. Taxes which target the wealthy however, shouldn’t have nearly the same direct impact on equality as they currently do. The way they should help with equality is that they provide the government with income without taxing the poor, which allows for either a tax break for taxes the poor pay, or service which the poor will use.
If I tax luxuries, mansions, and inheritance, but then spend that revenue on health tax credits, enterprise investment scheme, foreign investor tax credits and a corporate tax cut, this wouldn’t do much for the poor, other than possibly indirectly through a reduced unemployment rate from a stimulated economy.
Point is, taxing the wealthy should only provide a small bump for equality, and only seriously improve it if I spend the funds on helping the poor.